Philippine Micro Chips - Cirtek hoping to take over Thailand Electronics Plant

While foreign sales of the country's electronic products saw huge drops in the first half, with June alone seeing a 14.6% annual fall to $1.886 billion, Cirtek says it sees demand picking up this semester.

"We hope to conclude it (negotiation) by the third quarter of 2012. But you know, just like in any M&A (mergers and acquisitions), it's very difficult to predict," said Anthony T. Buyawe, the company's chief financial officer, in a telephone interview on Friday (August 31, 2012) last week.

"But there is common ground for both parties to agree."

Cirtek first announced in June that it was conducting "due diligence for acquisitions outside the Philippines," which the company claimed would "improve its top line."

"We do the same products, but they are more efficient in doing other products, so that would complement us," Mr. Buyawe said, adding that the acquisition will also "boost the company's efficiency" aside from "expanding its capacity."

Cirtek said it provides "turnkey solutions that include package design and development, wafer probing, wafer back grinding, assembly and packaging, final testing of semiconductor devices."

Last July, the company issued $10 million worth of corporate notes to Metropolitan Bank and Trust Co., with proceeds to be used for acquisitions, Mr. Buyawe said.

"The acquisition price is less than $10 million," Mr. Buyawe said, referring to the Thailand-based firm, even as he declined to be more specific.

Excess funds, he said, could help another prospective acquisition in Malaysia.

"We are also looking at a company in Malaysia but we like to finish first the one in Thailand," Mr. Buyawe added.

The expansion comes as the company said it is expecting an additional $2.2 million in annual revenues from new customers while its manufacturing facility in Laguna will be fully utilized by the end of the year, the company said in June.

In 2011, Cirtek booked $3.97 million in net income, up by 10.27% from $3.60 million last year as net sales surged by 7.97% to $37.11 million from $34.37 million, its financial statement submitted to the Philippine Stock Exchange showed.

For its domestic expansion, Mr. Buyawe said the company may build a third manufacturing facility in Laguna by the end of the year.

Mr. Buyawe also said the company is bullish on its prospects this semester, as "demand for electronic devices is expected to pick up later this year."

In the first half, the company's net income rose to $1.75 million, up by 4.16% from the $1.68 million recorded in the same period last year due to higher sales of its products.

Shares of Cirtek slipped 3 centavos or 0.31% to 9.65 apiece from 9.68 last Wednesday (September 5).

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